(CNS Business): A summary of a National Risk Assessment that began in 2014 has been released to the public two years after it was finished, ahead of Cayman’s fourth round of Mutual Evaluation by the Caribbean Financial Action Task Force (CFATF) at the end of the year. The assessment found a catalogue of issues that the country needs to address, but in the two years since work on it began, government has introduced a number of laws and amendments, though there is still plenty of work to be done by the next government to ensure Cayman’s offshore sector makes the grade.

Last week, the Attorney General’s Chambers released findings from the first ever National Money Laundering and Terrorist Financing Risk Assessment (NRA), initially to the financials sector and then the wider community.

“It is important for us to understand the threats, risks and vulnerabilities that face our jurisdiction,” Attorney General Samuel Bulgin said in a press release. “These summary results are based on analyses of reports from competent authorities, government agencies, financial institutions and law enforcement agencies, and as such they represent a first-time review of the key risks in the Cayman Islands.”

Preliminary findings of this assessment showed Cayman still had work to do in the battle against money laundering, terrorist financing, tax evasion and other financial crime. Vulnerabilities at the national level were found to include a “less than fulsome implementation of the risk-based approach to AML/CFT regulation”, as well as shortcomings in domestic cooperation among government agencies at the operational level, despite strong inter-agency cooperation at the policy level.

The assessment also pointed to a lack of supervision of relevant non-financial businesses and professions and a sanctions regime which required enhancement to meet the “effective, proportionate and dissuasive” standard required by the CFATF.

While legislation has been passed to address many of these issues, such as the need for a legal practitioners law and strengthening non offshore risky areas like the cash transfer sector, the new government will still have its work cut out to get ready for the year-end peer review to keep Cayman off any new black, grey or other lists of non-compliant jurisdictions or avoid other potential challenges and sanctions to the offshore industry.

Government set up a specific Anti-Money Laundering Unit under the Attorney General’s Chambers to enhance interagency cooperation and policy coordination on the issue; it has broadened the ability for the authorities to freeze assets to troublesome countries and people, and has improved the monitoring and supervision of non-profit organisations, real estate agents and dealers of precious metals and stones. It has also removed the criminal sanction for breach of confidential information by repealing what was always considered one of Cayman’s most controversial laws, the Confidential Information (Preservation) Law, and replacing it with the Confidential Information Disclosure Law.

Government has also stepped up cooperation with international law enforcement agencies, and has implemented new investigative methods, including canine resources such as dogs that can sniff out large quantities of cash that smugglers attempt to bring into Cayman.

But in the remaining months before the peer review government will need to continue work to address all of the findings of the National Risk Assessment into a comprehensive strategy.

This includes “further legislative enhancements, improved cooperation between local stakeholders, and increased awareness of anti-money laundering and counter-terrorist financing among the industry and general public, among others,” officials said.

The CFATF mutual evaluation will take place from 4 to 15 December. The first stage of the review began in January this year with a desk-based look at technical compliance and effectiveness of the jurisdiction’s anti-money laundering and counter terrorist financing regime.

Comments (1)

We must do better at Money Laundering...I only heard one reference on American TV this weekend to money laundering in "The Caymans", on NCIS I think. Could our politicians actually do better in their defense of Cayman against domiciles such as Delaware and Nevada? Unless you are totally corrupt and determined to defraud, checks and balances here in Cayman now are such that you really should not try...you will get caught.

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